Developer withdraws oil sands proposal
A major effort to expand development of Canada’s oil sands has collapsed shortly before a deadline for government approval, undone by investor concerns over oil’s future and the political fault lines between economic and environmental priorities.
Nine years in the planning, the project would have increased Canada’s oil production by roughly 5 percent. But it would have also slashed through 24,000 acres of boreal forest and released millions of tons of climate-warming carbon dioxide every year.
Some Canadian oil executives had predicted Prime Minister Justin Trudeau and his Cabinet would approve the project by a regulatory deadline this week, though with burdensome conditions. But in a letter released Sunday night, the Vancouver, B.C.-based developer, Teck Resources, declared “there is no constructive path forward.”
The unexpected withdrawal relieves Trudeau of a choice that was sure to anger environmentalists or energy interests, if not both.
Conservatives were quick to blame Trudeau for the loss of a project they said would have created thousands of jobs and given an economic lift to Alberta, the hub of Canada’s energy industry, which has suffered from low oil prices over the last five years. They suggested the government felt pressure from weeks of protests by indigenous groups opposing a natural gas pipeline, even though some indigenous groups supported the Alberta project, known as the Frontier mine.
“It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority,” Alberta’s premier, Jason Kenney, said.
The chief executive of Teck Resources, Don Lindsay, said in a letter to federal officials that global capital markets, investors and consumers were looking to governments to put “a framework in place that reconciles resource development and climate change, in order to produce the cleanest products.”
While environmental concerns were part of government and company calculations, there was no guarantee that the Frontier project would have gone forward even if it gained final regulatory approval.